The ’40 Act Solution: Easily Monitor Compliance for Liquid Alternatives

Imagine maintains a comprehensive database of their client’s portfolio data. What we’re best at is figuring out how to aggregate that data for an investor or the government in a way that allows us to provide limit data and transparency. We’ve become adept at reacting to the government and clients quickly with new aggregations of information.

One way Imagine has recently reacted is the development of our ’40 Act Solution. Bridging the gap between traditional and mutual fund requirements, this innovation provides flexible risk management solutions for a highly-regulated investment environment.

Clients were looking for a solution that handled both the functions of portfolio and risk management while maintaining government compliance. The liquid alternative investment arena has grown rapidly, catching the attention of the SEC. Imagine’s ’40 Act Solution provides critical information managers want (and need) to view within a flexible, customizable dashboard. The dashboard performs essential functions like:

  • Drills down to see and correct real-time limit breaches
  • Creates alerts for positions that are nearing limits
  • Tracks trades that keep the fund in compliance
  • Creates a watch list to capture risk across an entire portfolio
  • Stresses the portfolio against many historical market events to see how they would impact the portfolio

We collaborated with Larch Lane Advisors to address the technological challenge of implementing a flexible system that could monitor compliance with specific regulations for liquid alternatives. Our focus was to provide a solution that combined traditional risk management with accounting capabilities, a combination not typically found in most risk management software.

We’ve been doing this for twenty-one years and Imagine really leads the way in reacting and evolving to the constant changes occurring in the market. Our consultants make sure clients turn those changes into opportunities.

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About the Author

Trever Evans has been with Imagine Software for eleven years and has been participating in scoping, development, and implementation of larger scale initiatives for Imagine. He holds an MS in Quantitative Financial Economics from Oklahoma State University. He is currently Director of Consulting for Imagine.

Contact Trever by email or phone: 646-827-4483.

Monitor Limits with the UCITS Dashboard–Flexible, Transparent, Customizable

A Q&A with Anatoliy Salman
What is UCITS?
Investment funds authorized for sale in Europe are governed by a set of regulations. These regulations are called Undertakings for the Collective Investment of Transferable Securities (UCITS).

Why did you create the UCITS dashboard?
It just made sense for us to do this–Imagine is a trusted source for our clients. We created a dashboard that frees our clients to meet the challenges presented by UCITS (and other regulatory requirements). We see it as a great tool that provides transparency and flexible monitoring in one clean visual representation. Our dashboard eliminates the need for–and the potential risk involved with–using manual methods of limits calculations.

How does it work?
We customize the UCITS dashboard on a client-by-client basis. So there’s a quick set-up period where we create all the necessary custom reference tables, appropriate tagging, and the definition of limits the client wants to include–which by the way, don’t have to be UCITS-specific.

The dashboard is powered by an app that performs all the required aggregations and calculations. The data is pulled from your UCITS portfolio in Imagine. Once in Imagine, you load the dashboard like any of our dashboards. It updates in real time, providing intraday information with PDF reporting available for end of day reports.

How does this dashboard help clients?
This dashboard helps our clients:

  • Perform real-time, trade-by-trade risk analyses, including “what-if” simulations to add, reduce or increase positions to view portfolio and enterprise risk
  • Deliver daily UCITS-compliant reports on VaR, CVaR, relative VaR, leverage, counterparty risk and delta-adjusted exposures
  • Optimize allocations and strategies based on cross-asset class and pre-calculated market data (including derivatives) for selected time periods

With the dashboard, clients can:

  • Drill-down to view and correct limit breaches in real-time
  • Create alerts for positions that are nearing limits
  • Create a watch-list to capture risk across the entire portfolio
  • Efficiently monitor funds and fund expenses

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About the Author
Anatoliy Salman is a consultant at Imagine’s New York office. He has been with Imagine for four years and is responsible for business intelligence. He was integral in the development of solutions for ’40 Act, AIMFD,  UCITS, and RRC. He holds a Bachelors in Business Administration with a major in finance from Baruch College.

Contact Anatoliy by email or phone: 646-827-4486